Salad farm wilts after supermarket clients slashed the price they offered for its produce

A salad grower that supplied Asda and Tesco went into administration after its supermarket clients slashed the price they offered for its produce.

Hedon Salads collapsed at the end of November. Administrators said that ‘as a result of the economic climate, the price which customers have dictated they would be willing to pay for fruit and vegetables, especially over the past 12 months, have been historically low’.

The creditors’ report emerged shortly after the Government appointed a watchdog to police how supermarkets treat suppliers.

Under the plans, supermarkets can be fined if they breach the terms of a new Groceries Code.

Set up in 2002, Hedon farmed 72 acres in East Yorkshire and at one stage turned over £400 million, with supermarkets buying its produce through a middleman. But sales had halved every year for the past three years, administrators said, falling to £9 million in 2011.

Creditors were owed £1.8 million at the time of Hedon’s collapse with trade creditors owed £253,000. Asda and Tesco declined to comment.